Correlation Between Elia Group and Care Property
Can any of the company-specific risk be diversified away by investing in both Elia Group and Care Property at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elia Group and Care Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elia Group SANV and Care Property Invest, you can compare the effects of market volatilities on Elia Group and Care Property and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Elia Group with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elia Group and Care Property.
Diversification Opportunities for Elia Group and Care Property
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elia and Care is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Elia Group SANV and Care Property Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Care Property Invest and Elia Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Elia Group SANV are associated (or correlated) with Care Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Care Property Invest has no effect on the direction of Elia Group i.e., Elia Group and Care Property go up and down completely randomly.
Pair Corralation between Elia Group and Care Property
Assuming the 90 days trading horizon Elia Group SANV is expected to under-perform the Care Property. In addition to that, Elia Group is 1.69 times more volatile than Care Property Invest. It trades about -0.15 of its total potential returns per unit of risk. Care Property Invest is currently generating about -0.01 per unit of volatility. If you would invest 1,150 in Care Property Invest on November 7, 2024 and sell it today you would lose (10.00) from holding Care Property Invest or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elia Group SANV vs. Care Property Invest
Performance |
| Timeline |
| Elia Group SANV |
| Care Property Invest |
Elia Group and Care Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elia Group and Care Property
The main advantage of trading using opposite Elia Group and Care Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elia Group position performs unexpectedly, Care Property can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Care Property will offset losses from the drop in Care Property's long position.| Elia Group vs. Ackermans Van Haaren | Elia Group vs. Groep Brussel Lambert | Elia Group vs. Sofina Socit Anonyme | Elia Group vs. ageas SANV |
| Care Property vs. Aedifica | Care Property vs. Cofinimmo SA | Care Property vs. Xior Student Housing | Care Property vs. VGP NV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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